A Better Approach to High-Yielding Foreign Stocks

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Dividend yields have declined over the past several decades, causing some investors to pursue high-yielding stocks to shore up their income. Fund providers have responded to this desire with rules-based strategies specifically focused on yield.

But it's important to remember that high-yielding stocks can be riskier than the overall market. Therefore, the risk-management aspect of these funds becomes an important part of their investment merit, as are low fees and diversification. Don't ignore these considerations in the quest for yield.

Daniel Sotiroff does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.